Bi-Weekly Report 11 - 24 September 2018


The New Economic Programme is a welcome response by the Government to the recent market volatility



The Romanian economy gained momentum in Q2:18, after a weak start to the year



The Bulgarian economy loses momentum in Q2:18

The labour market shows signs of stagnation



The fiscal policy stance turned expansionary in 7M:18, with the 4-quarter rolling fiscal surplus declining by 0.5 pps y-o-y to 0.6% of GDP



Opinion polls ahead of the September 30th referendum show the majority are in favour of the "name" agreement

A gradual economic recovery continued in H1:18

Labour market conditions tightened further in Q2:18, supported by active labour market policies and solid economic growth



External adjustment continued in H1:18, with the 4-quarter rolling current account deficit moderating to 6.7% of GDP in Q2:18 from 7.5% in Q4:17



S&P upgraded Cyprus to investment grade (BBB-) for the first time in 6 years

Cyprus raised EUR 1.5bn (7.4% of GDP) in Eurobond markets at a historically-low yield of 2.4%, benefiting from its recent rating upgrade grade and a benign global backdrop

Economic activity maintained its momentum in Q2:18 (up 3.9% y-o-y)



Customer deposits (FX-adjusted) rose by 24.1% in FY:17/18, underpinned by strengthening confidence in the Egyptian economy and higher EGP remuneration rates

Credit to the private sector (FX-adjusted) lost momentum in FY:17/18, on the back of higher lending interest rates

The CBE is likely to adopt a "wait-and-see" stance at its September 27th MPC meeting


Appendix: Financial Markets

Bi-Weekly Report 11 - 24 September 2018